Energy Secretary Jennifer Granholm violated a federal conflict-of-interest law by improperly disclosing stock sales




  • In Politics
  • 2022-01-20 18:14:15Z
  • By Business Insider
US Secretary of Energy Jennifer Granholm, her right hand raised to shoulder level, addresses reporters during a press conference in the White House briefing room.
US Secretary of Energy Jennifer Granholm, her right hand raised to shoulder level, addresses reporters during a press conference in the White House briefing room.  
  • Granholm sold up to $240,000 in stocks from April 2021 through October 2021.

  • She disclosed the trades in December 2021 - weeks or months after a federal deadline.

  • Granholm's situation follows numerous STOCK Act violations by lawmakers and congressional staff.

Secretary of Energy Jennifer Granholm violated a federal conflicts-of-interest and transparency law by improperly reporting up to a quarter-million dollars in stock sales, according to an Insider analysis of financial disclosure documents.

Granholm - one of the Biden administration's highest-ranking officials whose personal finances have come under previous scrutiny - reported making nine stock trades between April 30, 2021, and October 26, 2021.

But she disclosed these trades to the Office of Government Ethics on December 15, 2021, and December 16, 2021 - either weeks or months past a 30-day disclosure deadline prescribed by the Stop Trading on Congressional Knowledge Act of 2012.

Granholm's stock sales involved shares of biopharmaceutical firm Gilead Sciences Inc. - a major government contractor and maker of COVID-19 treatment remdesivir - mobility service Uber, and real estate company Redfin.

Administration officials declined to discuss the timing or vetting of Granholm's financial disclosures. A Department of Energy spokesperson did not explain why Granholm's disclosures were late.

"The Department of Energy's ethics office has certified that based on her reports, Secretary Granholm's financial holdings are in compliance with the law," Department of Energy spokeswoman Charisma Troiano wrote in an email to Insider.

In disclosures filed with the Office of Government Ethics, Granholm wrote "No" when asked if she'd been notified about the stock transactions more than 30 days ago.

That same document, however, includes instructions emphasizing that transactions must be disclosed within 30 days of notification of a stock trade "but not later than 45 days after the transaction," regardless of when Granholm knew about them. High-ranking officials such as Granholm often use financial advisors or brokers to execute trades on their behalf, although the level of involvement Granholm has in managing and overseeing her personal finances is unclear.

First-time violators of the STOCK Act's disclosure provisions generally face a $200 fine. It's unclear whether Granholm has paid any penalty.

Pleading ignorance isn't a defense against the STOCK Act's disclosure deadline, said Walter Shaub, a former director of the Office of Government Ethics.

"She's saying that she only just learned of the transactions … so it's possible the ethics officials took that statement at face value" and certified them, said Shaub, who's now a senior fellow at the nonpartisan Project on Government Oversight.

The trio of ethics officials who signed off on Granholm's filings - Department of Energy attorneys Susan Beard and Rachel Kestenbaum, as well as Office of Government Ethics aide Megan Granahan - should have dug deeper, Shaub said.

"Why didn't she know about the transactions at the time?" Shaub asked. An Office of Government Ethics spokesperson acknowledged Insider's multiple requests for comment but didn't respond to any of the questions posed.

Granholm, who the Senate confirmed in February 2021, faced scrutiny early on for owning millions of dollars worth of stock in Proterra, Inc., a developer of zero-emission electric vehicles that President Joe Biden touted early in his presidency.

Granholm told ethics officials she would resolve the issue by liquidating her holdings "as soon as practicable but not later than 180 days after" her confirmation.

"Secretary Granholm has acted in full accordance with the comprehensive ethical standards set by the Biden Administration and has completed her divestment well ahead of the time required by her ethics agreement," a Department of Energy spokesperson said at the time.

Throughout her career in public service, which includes two terms as Michigan's governor, Granholm has chided Republicans for a lack of transparency.

"Conduct the people's business in the OPEN. Where's the transparency you campaigned on @realDonaldTrump?" she tweeted in 2017 when then-President Donald Trump refused to release White House visitor logs.

More recently, Senate Committee on Energy and Natural Resources ranking member John Barrasso, a Republican of Wyoming, in April 2021 called for an investigation into Granholm's personal investments. A few months later Republicans on the House Oversight and Reform Committee lit into her about a "pattern" of ethical lapses at the agency after another administration official's financial ties got called into question.

Granholm's STOCK Act violations follow Insider's "Conflicted Congress" project, which revealed how dozens of federal lawmakers and at least 182 senior-level congressional staffers have violated the STOCK Act, and detailed how conflicts-of-interest abound. Together, they've avoided serious consequences.

Republicans and Democrats alike responded by introducing several bills and resolutions that, to varying degrees, limit or ban lawmakers, their immediate family members, and senior congressional staff from trading individual stocks.

House Speaker Nancy Pelosi, her right hand held nearly at eye level, index finger pointed towards the sky, speaks to reporters outside Union Station in Washington, DC.
House Speaker Nancy Pelosi, her right hand held nearly at eye level, index finger pointed towards the sky, speaks to reporters outside Union Station in Washington, DC.  

House Speaker Nancy Pelosi in December publicly pooh-poohed the idea of further restricting congressional stock trading.

"We are a free-market economy. They should be able to participate in that," Pelosi said at the time.

But facing blowback from both liberals and conservatives - lawmakers from Democratic Rep. Alexandria Ocasio-Cortez of New York to Republican House Minority Leader Kevin McCarthy of California have said they either endorse or are open to a stock ban - Pelosi on January 14 instructed the Committee on House Administration to consider harsher penalties for STOCK Act scofflaws.

Then, on Thursday, Pelosi told Insider she'd be open to entertaining bills that, to varying degrees, limit or ban stock trades by members of Congress and their families.

"If members want to do that, I'm okay with that," Pelosi said.

Pelosi's remarks came just hours after former President Donald Trump chided Pelosi for frequent stock trades made by her husband, investor Paul Pelosi.

Recent polling by the firm Data for Progress found that 67% of US voters support a ban on lawmakers trading stocks while in office.

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